Tourism Industries International Travel and Forecast for the US -- Chart 16
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Yes we still see positive growth over the next four years, primarily due to the overseas and Mexican markets. Canada may still remain a weak segment. Historically, Mexico and Canada have accounted for about half of total international arrivals to the United States. By 2001, however, Canada's share is projected to drop to 29 percent from 45 percent in 1991 and Mexico will gain some recently lost ground. So by 2001 our North American neighbors will account for just less than 48 percent of total arrivals.

Mexico: Financial volatility in Mexico has led to the continuous depreciation of the peso. By mid September 1998, the peso was worth 29% less than at the end of 1997. In addition to the depreciation, social unrest continues to raise concerns. Even with some financial uncertainty in the Latin American countries, though, we expect Mexican arrivals to increase by 6% in 1998. However, our arrivals outlook for the remainder of the forecast period is bleaker than previously projected. Mexican arrivals are now expected to increase by only 1-2% annually. Of course, a Brazilian devaluation would downgrade these expectations.

Canada: Global financial turmoil threatens Canada's economy. As pointed out earlier, a key influence on the arrivals to the U.S. is the exchange rate of the Canadian dollar to the U.S. dollar. The forecast for the strength of the Canadian dollar shows the value to be at its lowest for the next 4-5 years, appreciating slowly against the U.S. dollar. This slow appreciation will bolster some consumer confidence and serve to nudge Canadians to return to the U.S. for their longer shopping trips along the border and their sunbelt, winter destinations. However, the appreciation is likely to be less than 10 percent so between 1997 and the year 2001 this will not be a terribly strong motivator.

We forecast Canadian arrivals to decrease by 7% in 1998 and over one and a half percent in 1999. The 1998 decline, however, as I said earlier, may turn out to be a few points greater than stated here. For the longer term, arrivals are projected to recuperate and grow by 4% in 2000 and by over 3% in 2001.
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Chart 16 - World Region Forecast (3)

World Region Forecast (3)

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